The following Year 1 consolidated cash flow statement was prepared for Standard Manufacturing Corp. and its 60%-owned subsidiary, Pritchard Windows Inc.:
(a) Did the loss on the sale of equipment shown above result from a sale to an affiliate or a non-affiliate? Explain.
(b) Explain why the amortization of bond premium is treated as a deduction from net income in arriving at net cash flow from operations.
(c) Determine the net income of Pritchard Windows for Year 1. (Assume no intercompany transactions or unrealized profits and that the only change in the unamortized acquisition differential during the year was the goodwill impairment loss.)
(d) Explain why dividends to non-controlling shareholders are not shown as a dividend in the consolidated retained earnings statement but are shown as a distribution of cash in the consolidated cash flow statement.
(e) Determine the amount of dividends paid by Pritchard Windows in Year 1.

  • CreatedJune 08, 2015
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